When it comes to relationship property law in New Zealand, one of the most misunderstood aspects is when and how a relationship becomes de facto. The legal threshold for this catches many off guard.
You don’t have to walk down the aisle together for the law to consider you a couple. In fact, after only three years of being in a relationship, your property may be treated the same way as if you were married if your relationship is deemed de facto.
What’s more, if the relationship ends, the starting point is a 50/50 split of any relationship property – any property assessed as relationship property in accordance with the provisions of the Property (Relationships) Act 1976. This is regardless of whose name is on the title or account.
What counts as a de facto relationship?
A de facto relationship is defined as a relationship between two people (aged 18 or over) who, in most cases, live together as a couple. That might sound straightforward, but the legal criteria goes well beyond just sharing a roof.
If a couple does not agree that they were in a de facto relationship, or for how long, the court can look at various factors to determine if the relationship is de facto. These include whether you:
- live together (you don’t always have to)
- have a sexual relationship
- share finances or support one another
- have bought assets together
- committed to a shared life or raise children together
- undertake household duties for each other
- how others perceive your relationship
Not all of these factors need to be present and the list is not exhaustive. The court will take a holistic view of the relationship and circumstances – this means even casual arrangements could qualify as de facto relationships under the law.
Why this matters
Once they’ve passed the three-year mark (or earlier, if you have a child together), couples start building up relationship property. This includes, but is not limited to:
- the family home, no matter who paid for it or when it was acquired
- furniture, vehicles and household items
- income earned during the relationship
- KiwiSaver accumulated during the relationship
- any assets bought using shared funds
At the end of the relationship, whether through separation or death, relationship property is usually divided equally. That’s the default unless you’ve entered into a formal contracting out agreement.
What about short term relationships?
Even if a relationship lasts less than three years, relationship property law can still apply in some situations. If there’s a child from the relationship or if one partner has made substantial contributions (financial or otherwise), a claim can still be made. In these cases, division is based on contributions rather than a 50/50 split.
The bottom line
If you’re in a serious relationship, or think you might be, it’s worth understanding how the law sees your situation. Many people don’t realise that what they consider ‘mine’ might legally be ‘ours.’
You need not be alarmed, but you do need to be informed. Whether you’re buying property together, moving in, or starting a family, it pays to understand when relationship property law kicks in and what that means for your future.
If both partners take legal advice on these issues, they can enter into an agreement so they can decide for themselves what should be divided in the event of the relationship ending.
